Mercosur and the Marketplace Reality of South America: What It Means for European Brands

What is Mercosur — and why does it exist?

Mercosur stands for Mercado Común del Sur, or Southern Common Market. The name reflects a simple ambition: to reduce trade friction within South America and strengthen the region’s position in global trade.

The bloc was formally established in 1991 through the Treaty of Asunción, signed by Brazil, Argentina, Uruguay and Paraguay. At the time, South American economies were emerging from decades of protectionism and macroeconomic instability. Regional integration was meant to unlock growth — and provide political stabilisation.

Progress has been uneven. Often contested. Sometimes stalled.

Still, Mercosur remains the central institutional framework governing trade relations in South America. Venezuela later joined the bloc but is currently suspended; Bolivia is in the process of accession.

The EU–Mercosur agreement: what does it actually change?

Negotiations between the European Union and Mercosur began in 1999 and reached a political agreement in 2019. Ratification is still pending and politically contested in several EU member states, particularly due to environmental and agricultural concerns.

Economically, however, the scope is significant. The agreement provides for the gradual elimination of tariffs on around 90% of EU exports to Mercosur, measured by tariff lines and trade volume. For these goods, import duties are reduced to zero over multi-year transition periods.

This matters because the starting point is extreme.

Historically, EU exports into Mercosur markets have faced import duties of:

• up to 35% on fashion, textiles, footwear and leather goods
• around 14–20% on industrial goods and household appliances
• often above 20% on automotive and mechanical products

Even when reductions are phased in, moving from tariff levels of 30–35% toward zero fundamentally changes pricing, margins and competitive positioning. In categories such as fashion or footwear, tariff liberalisation alone can determine whether European products are priced out of the market — or finally become competitive.

What the agreement does not remove are non-tariff barriers.
Tax complexity remains. Customs procedures remain. Compliance requirements remain. Logistics constraints remain.

Mercosur lowers the economic barrier to entry.
Not the operational reality.

Marketplace Universe Insight
For years, tariffs — not demand — were the biggest blocker for European fashion brands in South America. Mercosur doesn’t simplify execution. But it finally changes the price equation.

What Mercosur means for European brands in practice

For European brands, Mercosur primarily improves economic viability. Execution, however, remains complex.

• Logistics networks are far less standardized than in Europe.
• Delivery times vary widely by region.
• Last-mile performance drops sharply outside major urban centres.
• Returns are often slow, costly and inconsistent.

There is no single standard.

Payment preferences add another layer of friction. Installment-based purchasing is not a feature in markets such as Brazil — it is a baseline expectation. Tax regimes remain fragmented and administratively demanding. Cross-border shipping still requires local expertise.

This is not a plug-and-play market.

Taken together, these frictions explain why brand-owned D2C plays only a marginal role in South America. Consumers overwhelmingly transact via marketplaces that bundle discovery, trust, payments, logistics and customer service into a single ecosystem — effectively acting as market infrastructure.

For European brands, marketplaces therefore become the default route to market — not because they are strategically ideal, but because they are structurally unavoidable.

The South American marketplace landscape: five platforms that matter

Mercado Livre

Mercado Livre is the dominant marketplace platform in South America. Originally founded in Argentina, it has evolved into a full-stack commerce ecosystem where marketplace, logistics and payments are tightly integrated. In markets like Brazil, Mercado Livre functions less as a sales channel and more as core ecommerce infrastructure.

Hard facts:

• Operating company: MercadoLibre S.r.l.
• 2024 ecommerce revenue: ~USD 9.2 bn
• Active markets: Brazil, Argentina, Mexico, Chile, Colombia
• Assortment focus: Generalist; electronics and general merchandise
  

Magalu

Magalu is the marketplace and digital brand of Magazine Luiza, one of Brazil’s largest retail groups. It combines first-party retail with third-party sellers and strong omnichannel integration via a nationwide store network. The platform is deliberately focused on depth in Brazil rather than regional expansion.

Hard facts:

• Operating company: Magazine Luiza S.A.
• 2024 ecommerce revenue: ~USD 8.6 bn
• Active markets: Brazil
• Assortment focus: Electronics, home appliances, general merchandise

Casas Bahia Marketplace

Casas Bahia Marketplace operates as part of Grupo Casas Bahia and is deeply embedded in Brazil’s mass-market retail and financing culture. Installment-based purchasing is central to the model, making the platform especially relevant for price-sensitive categories and high-volume products.

Hard facts:

• Operating company: Grupo Casas Bahia S.A.
• 2024 ecommerce revenue: ~USD 3.6 bn
• Active markets: Brazil
• Assortment focus: Electronics, home appliances
  

Falabella Marketplace

Falabella Marketplace follows a department-store-led marketplace model with a stronger emphasis on curation and brand environment. Originating in Chile, it serves several Andean markets and is structurally better suited to mid-range and premium brands than Brazil’s mass-market platforms.

Hard facts:

• Operating company: Falabella S.A.
• 2024 ecommerce revenue: ~USD 2.4 bn
• Active markets: Chile, Peru, Colombia
• Assortment focus: Furniture, homeware, fashion

Americanas Marketplace

Americanas Marketplace remains a well-known name in Brazilian ecommerce but has lost strategic momentum following financial restructuring. While still relevant in selected categories, it now plays a more tactical role compared to the country’s leading platforms.

Hard facts:

• Operating company: Americanas S.A.
• 2024 ecommerce revenue: ~USD 570 m
• Active markets: Brazil
• Assortment focus: Electronics, FMCG

What about Amazon?

Aside from homegrown platforms, international marketplaces also play a role in South America — most notably Amazon. While Amazon is not the dominant force it is in Europe or North America, ECDB data shows that it has established a meaningful presence in parts of the region, particularly in Brazil.

Based on ECDB market overviews, South American ecommerce GMV is concentrated among a small number of platforms:

1. Mercado Livre – approx. USD 9.2 bn
2. Amazon – approx. USD 7–8 bn in South America, with Brazil as the core market
3. Magalu – approx. USD 8.6 bn (Brazil-only)
4. Grupo Casas Bahia (Casas Bahia / Ponto) – approx. USD 3.6 bn
5. Falabella Marketplace – approx. USD 2.4 bn

This ranking underlines a key structural point: South America is not an “Amazon-first” region. Local platforms dominate GMV, traffic and consumer mindshare — especially in Brazil.

Is Amazon your entry into South America?

Amazon plays a role in South American ecommerce — but a limited one. Its strongest and most developed market in the region is Brazil. Outside Brazil, Amazon’s relevance drops quickly compared to local marketplace leaders.

For European brands, Amazon can work as a low-friction entry point, especially for testing demand with familiar tools and processes. But it does not define local standards for logistics, payments or consumer behaviour.

Marketplace Universe Insight
Amazon may open the door to the Americas.
Local marketplaces determine whether you can actually gain a foothold.

Key learnings for European brands

Mercosur lowers tariffs and reshapes pricing dynamics.
What is does not do, is to standardize execution.

Brazil dominates the region. Marketplaces dominate Brazil. Domestic platforms dominate those marketplaces. For European brands, success will depend less on trade agreements — and far more on choosing the right local market infrastructure.

19.01.2026 – Written by Ricarda Eichler, Journalist and Author for OHN